ANALYSIS: Vale’s Q3 result the most shining of top four
For the first nine months of 2018, the four iron ore giants produced 869.5 million tonnes of iron ore, up 3.4% on year.
Vale’s achievement has been of little surprise, as China’s steel mills, with their steel margins back to the high level of Yuan 850-1,200/tonne ($122-173/t), which was seen a decade ago, are more willing to feed higher-grade ferrous content fines with lower impurities into the blast furnaces especially when Beijing has been enhancing its efforts in battling against air pollution.
Chinese steel mills, therefore, have been facing probability of short and long-term restrictions frequently throughout the year since 2018 including the winter restrictions that will run four to five months since the end of October or the beginning of November.
Vale, with higher-grade iron ore supplies with lower impurities, therefore, has been leading in the competition against the other low- to medium-grade iron ore suppliers from the Australian counterparts, also prompting others to raise their ferrous content in their supplies in the next few years.
Table 1 Iron ore production/sale/shipment of major miners over July-September
|
Jul-Sept (million t) |
Q-o-Q |
Y-o-Y |
Jan-Sept (million t) |
Jan-Sept 2017 (million t) |
Y-o-Y |
2018 Guidance (million t) |
|
Rio Tinto |
Production (100% basis in Pilbara) |
82.54 |
-3.5% |
-2.9% |
251.20 |
241.93 |
3.8% |
330-340 (Shipment) |
Sale (100% basis in Pilbara) |
81.90 |
-7.5% |
-4.6% |
250.72 |
240.15 |
4.4% |
||
Vale |
Production |
104.95 |
8.5% |
10.3% |
283.65 |
275.15 |
3.1% |
390 (Production) |
Sale |
83.98 |
14.6% |
9.4% |
228.49 |
211.37 |
8.1% |
||
BHP |
Production (100% basis in Pilbara) |
69.34 |
-3.9% |
7.9% |
208.54 |
196.18 |
6.3% |
273-283 (Production for FY2019) |
Sale (100% basis in Pilbara) |
69.42 |
-2.8% |
9.6% |
208.61 |
196.98 |
5.9% |
||
FMG |
Production |
42.9 |
-2.7% |
2.9% |
126.1 |
128 |
-1.5% |
165-173 (Shipment for FY2019) |
Shipment |
40.2 |
-13.5% |
-8.6% |
125.4 |
128.3 |
-2.3% |
Table 2 Quarterly average price of miners’ major iron ore products ($/dmt CFR Qingdao)
|
Jul-Sept 2018 |
Q-o-Q |
Jul-Sept 2017 |
Y-o-Y |
|
Rio Tinto |
61% Fe PB Fines |
65.16 |
1.5% |
69.8 |
-6.6% |
Vale |
65.1% Fe Carajas Fines |
94.23 |
10.7% |
90.65 |
4% |
63% Fe BRBF |
73.83 |
8.3% |
68.69 |
7.5% |
|
BHP |
62.8% Fe Newman Fines |
67.97 |
2% |
72.65 |
-6.4% |
FMG |
58.3% Fe FMG Blend Fines |
45.49 |
6.5% |
52.08 |
-12.5% |
Written by Victoria Zou, zyongjia@mysteel.com and Zhiyao Li, Lizy@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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